ISLAMABAD: The Supreme Court of Pakistan upheld the Competition Commission of Pakistan’s finding in the PVMA price-fixing case, while reducing the association’s penalty from Rs50 million to Rs30 million.
A two-member bench comprising Justice Jamal Khan Mandokhail and Justice Salahuddin Panhwar ruled that the Pakistan Vanaspati Manufacturers Association (PVMA) violated Section 4 of the Competition Act, 2010 by collectively determining ghee and cooking oil prices.
The court upheld findings earlier reached by the Competition Commission of Pakistan (CCP) and the Competition Appellate Tribunal (CAT). It directed PVMA to deposit the revised Rs30 million penalty.
The case stemmed from federal government consultations with PVMA during 2007-09 aimed at reducing ghee and cooking oil prices. PVMA later communicated the agreed prices to its member companies.
The CCP concluded that PVMA had negotiated and fixed prices on behalf of competing manufacturers, violating Section 4(1), read with Section 4(2)(a), of the Competition Act. It originally imposed a Rs50 million penalty, which CAT subsequently upheld.
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In the judgment authored by Justice Mandokhail, the Supreme Court said competing businesses must set prices independently according to their own commercial considerations. It held that collective price determination through a trade association replaces independent pricing decisions with a common price and restricts competition.
The court also rejected the argument that the arrangement was lawful because the agreed prices were below prevailing market levels. It held that even a lower price does not remove a competition-law violation when competitors collectively determine that price.
The judgment further stated that public-interest objectives cannot justify interference with independent price competition.
